The truckload dry-van market is demonstrating a strong response to the current peak season, with spot rates and other key indicators reaching levels not seen in almost two years. According to the SONAR National Truckload Index (NTI), spot rates surged from $2.38 per mile to $2.52, a figure last observed in January 2023.
Key Market Indicators
SONAR data shows that outbound tender rejection rates have risen significantly, increasing by 63 basis points week-over-week. As of December 5, rejection rates reached 5.87%, their highest point since July 8, 2023. This upward trend suggests a tightening in truckload capacity, despite a noticeable decline in dry van outbound tender volumes compared to last year.
Tender volumes in the dry-van segment are down 7.32% year-over-year, with the volume index (VOTVI) at 7,926.19 points, compared to 8,551.79 points during the same period in 2022. This decline highlights a reduction in demand, yet market conditions remain tight—a situation that could indicate capacity constraints are driving current rate increases.
Fewer Active Trucking Authorities
Contributing to the tightening capacity is the drop in active trucking authorities. As of mid-December, there were 344,541 active trucking authorities, reflecting a 4% decrease from 358,985 at the same time last year. This reduction of 14,444 trucking authorities signals industry-wide consolidation, potentially due to rising operational costs and market pressures that have pushed smaller carriers out of the industry.
Implications for Shippers
The current dynamics suggest that while volumes are lower, capacity constraints are likely to persist, posing potential challenges for shippers. As tighter conditions prevail, even modest surges in freight demand could make it difficult for shippers to secure capacity without paying a premium.
Market analysts are advising shippers to consider locking in contract rates now, even if those rates are higher than expected, to ensure capacity during potential demand spikes. Looking ahead, any significant economic stimulus, such as policies introduced under the Trump administration, could further amplify demand, intensifying competition for capacity and potentially leading to a freight market imbalance.
Market Outlook
With reduced trucking authorities and tightening conditions, the market could face heightened pressure as 2025 approaches. Should demand increase substantially, carriers might have the leverage to negotiate stronger terms, reversing the dynamics seen in recent years where shippers held the upper hand. These conditions underscore the importance of proactive planning for shippers navigating the evolving dry-van market.
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